Return to S8-7, the South Mark (SM) investment in CitiSide bonds. Journalize the following on SM’s books:
a. Purchase of the bond investment on June 30, 2014. SM expects to hold the investment to maturity.
b. Receipt of semiannual cash interest on December 31, 2014.
c. Amortization of the premium on the bonds on December 31, 2014. Use the straight-line method.
d. Collection of the investment’s face value at the maturity date on June 30, 2019. (Assume the receipt of 2019 interest and the amortization of bonds for 2019 have already been recorded, so ignore these entries.)
In S8-7, South Mark (SM) owns vast amounts of corporate bonds. Suppose that on June 30, 2014, SM buys $950,000 of CitiSide bonds at a price of 102. The CitiSide bonds pay cash interest at the annual rate of 7% and mature at the end of five years.

  • CreatedJuly 25, 2014
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